Government of Maharashtra service payments taxable under SGST/CGST Act at 18% rate

The amount received for the supply of services during the post-GST period to the Government of Maharashtra is held to be taxable under the SGST/CGST Act. The applicable rate of tax for the taxable supply of services is determined to be 18% (9% each for CGST and SGST), as per Notification No. 11/2017-Central Tax (Rate) and subsequent amendments.

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Issues Involved:
1. Taxability of amount received for supply of services during the post-GST period under SGST/CGST Act.
2. Applicable rate of tax under SGST/CGST if the services are taxable.

Issue-wise Analysis:

Issue 1: Taxability of Amount Received for Supply of Services During Post-GST Period
The applicant, Allied Digital Services Ltd, entered into a contract with the Government of Maharashtra (GOM) for the design, development, implementation, and maintenance of a CCTV-based surveillance system. The contract was executed on October 28, 2013, prior to the implementation of GST. The project went "Go Live" on October 27, 2015, and ownership of the assets was transferred to GOM at that time. The applicant received payments post-GST implementation for services rendered under this contract.

Observations:
- The contract involves a composite supply of works contract as defined in Section 2(119) of the CGST Act, which includes design, development, implementation, and maintenance services.
- The contract is considered a works contract as it involves the transfer of property in goods and is for an immovable property.
- The CCTV system is permanently fastened to the street lighting poles and cannot be shifted without dismantling, making it an immovable property.
- The services provided post-GST are taxable under the GST Act as they constitute a composite supply of works contract.

Conclusion:
The amount received for the supply of services during the post-GST period to the Government of Maharashtra is taxable under the SGST/CGST Act.

Issue 2: Applicable Rate of Tax Under SGST/CGST
Having established that the services are taxable, the next issue is determining the applicable rate of tax. The applicant contends that the contract is a composite supply of works contract and should be taxed at 6% under both CGST and SGST.

Observations:
- As per Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017, and subsequent amendments, the composite supply of works contract is taxable at 18% (9% CGST and 9% SGST).
- The reduced rate of 6% each under CGST and SGST is applicable only to specific types of original works, which do not apply to the applicant's contract.
- The applicant's contract does not qualify as original works as defined under the CPWD Works Manual 2014.

Conclusion:
The applicable rate of tax for the applicant's taxable supply of services is 18% (9% each for CGST and SGST).

Order:
1. The amount received for supply of services during the post-GST period to the Government of Maharashtra (Home Department) is taxable under SGST/CGST Act.
2. The applicable rate of tax under SGST/CGST for the applicant's taxable supply of services is 18% (9% each for CGST and SGST).

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